Did you ever work in the UK for 3+ years ?

Important information...

ANYONE who worked in the UK for three or more years in the past decades has a limited opportunity to review past UK employment and top up underfunded pensions to give access to UK. At present thgese people may not access a UK pension but a temporary rule change allows these people to go back and add to the UK pension account so they can access a full UK pension based on the residency in the UK. There are loads of eligible Australians incl many Chartered Accountants who enjoyed working arrangements in the UK.

Ever worked in the UK? You could be eligible for thousands of dollars in retirement

 

Thanks Paul, definitely worth looking into.

 

Thank you Paul.I’ve been trying to get some info out of the pensions office for about 3 years now. I had all but given up but I will have one last go!

 

If it's the UK pension office, best to phone them first, once you have made contact and sent the paperwork then you never hear from them again and your payments arrive reqularly, I am in receipt of the UK pension - my husband was a Brit ...

 

Update on this: the grace period has been extended to 31 July, so you may still have time to act.

I contacted the company in the article via their website
Jason O'Connell | Life and retirement financial planning and they were super helpful. The fee is $880 payable in 2 hits. They prepared a letter for me and populated the required form. This has to be posted to HMRC in the UK.

I called HMRC who advised they have received my docs and a case manager will contact me in approx October re catch up contributions schedule. Believe this to be £173 national insurance for every year.

many thanks @Paul@PAS for the reminder, this is further than I have ever got before.

 

I contacted HM Revenue and Customs back in May regarding potential catch up payments.
Had given up expecting to hear anything as the deadline passed.
Today I got a letter from them outlining the 17 years of National Insurance payments I am eligible to make - approx GBP 825 per year.
I have 14 qualifying years already from when I lived and worked there. One needs 35 qualifying years to get the full UK pension.
So I will need to make voluntary contributions for an additional 4 more years before I get to pension age (67) to get the full pension.

The full UK pension is currently GBP 10,800 per year.
So for catch up payment of 17 x 825 = 14,025 plus four more years of 825 + cpi I will receive GBP 10,800 (plus cpi increases until start date) for the rest of my life.
I have until 5 April 2025 to make those catch up payments.

Seems like a no brainer.
Downside of being in Australia is that no further cpi increases are applied after the pension starts.
And of course it is subject to Aussie tax. No UK tax as It is below UK threshold and I have no other UK income.

Just over 7 years to wait to claim the pension.

Thanks to @Paul@PAS for providing the heads up.

 

Hi @Cadbury my partner has 12 qualifying years and only contributed 9 years. He is 56 now. Do you think it still worth trying to catch up? Will the UK pension be taxed here in Australia?

 

Deadline now extended to 5 April 2025 Deadline for voluntary National Insurance contributions extended to April 2025 - GOV.UK (www.gov.uk)

 

@Accidental Investor
Contact HM Revenue and Customs and ask them how much will need to be paid to catch up. Then you can decide based on the cost vs benefit.

Yes it is my understanding that UK pension payments are taxed in Australia.

 

Examples given in other places indicate that the catch up amounts are often minor v the benefits available. Each circumstance varies. HMR&C can give that information for a decision to be made

Example - Retrospective contributions will give you a large return on investment
Mr Devonport made a one-off payment of £2,608 ($4,807) to cover 16 years of National Insurance contributions.
Based on today's money, the further contributions required to receive the full state pension would total £1,793 ($3,307).
Mr O'Connell said if Mr Devonport did this and lived to 85 years, he would receive a UK state pension for 18 years.
"In today's money. it would equal £10,600 a year, over 18 years, so $351,072 in lifetime income," he said.

 

Tis is the Goto guy for aussies affected by these UK and Irish pension issues

Jason O'Connell | Life and retirement financial planning

 

Thank you for the recommendation. From the little I read, an Australian resident receives a UK State pension that doesn't increase with CPI. Receiving this might exceed the Australian Aged Pension income test threshold. Not sure if it is either-or? Affected too by the Australian Aged Pension taper test for assets (the 450k vs 900k sweetspot) so will definitely need to seek advice!

 

So I thought I would provide an update of where I got to. HMRC UK sent me a schedule of catch up national insurance instalments from 2006 to 2023. Around $165 for each year (class 2). This is to be paid by April 2025.

Apparently HMRC will then send me an annual reminder for future years. You must not miss making an Annual payment as you cannot catch up a second time!

Annual Catchup payments can also be made after reaching retirement age(67) to enable the full 35 years to qualify for the full UK pension. Or a minimum of 10 years for a part pension.

Jason O'Connell | Life and retirement financial planning will provide info of how to pay the premiums including required reference numbers.

And if anyone regularly transfers overseas in local currency (using Wise or instarem or bank transfer) I would be interested in finding out more about this as payments need to be exact amounts.

Hope this info is helpful.

 

How long did it take to get the schedule back from HMRC? Got around to doing this a couple of months ago but not heard anything yet.

Thanks for starting the thread Paul, had more qualifying years than I thought. Seems to be a no brainer with class 2 contributions.

 

6 months from HMRC receiving form to first letter from them.

 

Make sure you have a minimum of 10 year’s contributions to get a part pension as less than 10 is no pension.

 

Update: paid NIC class 2 contributions today from 2006 to 2023 tax years. Have received conflicting advice whether or not contributions can be made post age 67 when I will have 30 years contributions. 35 years NICs required for full pension. Part pension is paid pro rata based on contributions.